Toyota reaches $29 million multi-state settlement; Connecticut consumers will get $1.4 million

HARTFORD -- Attorney General George Jepsen announced Thursday that a $29 million multistate settlement agreement has been reached with Toyota Motor Sales, USA, Inc. over allegations the car manufacturer concealed safety issues related to unintended acceleration on certain Toyota and Lexus model cars.

Toyota agreed to pay a total $29 million to the 30 participating states to settle consumer protection claims over lack of timely disclosure and misrepresentations by the company. Connecticut will receive $1.4 million. Further, Toyota has agreed to provide additional restitution and incentives to vehicle owners to promote compliance with unintended acceleration safety recalls.

"This is a good result for the nation's consumers because Toyota has agreed to comply with all state laws prohibiting false and misleading advertising," Attorney General Jepsen said. "In addition, Toyota agreed to comply with all state lemon laws, and all state and federal laws that apply to motor vehicles manufactured or sold by Toyota in the United States, including any affirmative duty to notify consumers of a known safety defect."

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Connecticut was part of the nine-state executive committee that investigated the unintended acceleration issues and negotiated the settlement agreement. The states alleged that Toyota engaged in unfair and deceptive practices when it failed to timely disclose known safety defects with accelerator pedals, which caused unintended acceleration.

The safety and design defects were investigated separately by the National Highway Traffic Safety Administration, resulting in $48.8 million in fines and penalties paid by Toyota in April and December 2010.

The multistate investigation focused on consumer disclosure issues and misrepresentations, such as: when Toyota was aware of the acceleration problem; whether it made timely disclosure to consumers; whether Toyota misrepresented the safety of its vehicles to consumers through deceptive advertisements and whether Toyota sold reacquired vehicles without disclosing that acceleration complaints had been made about the vehicles.

The settlement agreement incorporates a number of recommendations aimed at promoting a safety culture within Toyota. The recommendations were the result of an independent review of Toyota's safety and quality processes, which found that Toyota's top-down management structure limited local input about potential problems; was resistant to outside feedback about design and safety of its products and failed to understand that safety problems were distinct from quality problems.

As part of the settlement agreement, Toyota has agreed to significantly change the safety culture within its United States operations by ensuring that its U.S. officials and officers have timely access to Toyota Motor Corporation information, as well as the authority to fully participate in all decisions affecting the safe operation of Toyota vehicles advertised and sold in the United States.

Among other settlement terms, Toyota is:

o Prohibited from reselling a vehicle it reacquired with alleged safety defects without informing the purchaser about the alleged defect(s) and certifying that the reacquired vehicle has been fixed,

o Prohibited from misrepresenting the purpose of an inspection or repair when directing consumers to bring their vehicles to a dealer for inspection or repair, and

o Required to exclude from the "Toyota Certified Used Vehicles" or "Lexus Certified Pre-Owned Vehicles" categories any vehicle acquired through lemon law proceedings or voluntarily repurchased by Toyota to ensure customer satisfaction.

Toyota has set up toll-free numbers for customers with questions about restitution and incentives available under the settlement. Toyota customers may call 1-800-331-4331; Lexus customers may call 1-800-255-3987. The lines are staffed Monday through Friday from 8 a.m. to 9 p.m. and from 10 a.m. to 7 p.m. on Saturday.

Assistant Attorneys General Matthew Fitzsimmons and Phillip Rosario, head of the Consumer Protection department, assisted the Attorney General with this investigation and settlement negotiations.